Starting a frugal flying club

The Wright Brothers Flying Club (motto: Wright side up!) was the first of thousands of organizations intended to enjoy flying on a budget. Though not as popular as they were in the 1970s, flying clubs are resurging in interest throughout the country, especially among budget-conscious pilots.

Flying clubs are about the passion pilots have for flight, as well as their budgets. For many pilots, the cost of owning an aircraft is beyond their means. Flying clubs offer a way for frugal pilots to co-own an aircraft.

A year ago, this column covered flying clubs. Following is a different perspective: How to form a frugal flying club with a focus on one of the most complex expenses — insurance.

Keeping an eye on insurance as you form a club can help you make smarter and more cost-effective decisions.

How do I know this? Recently, Bill Sneed of Aviation Insurance Resources (AIR) shared some valuable tips with me on forming a flying club with a focus on getting the best value. Bill has been a pilot since 1974 and flew as a California crop duster. He’s worked for AVEMCO and Falcon/Great Lakes and was president of the Aircraft Owners and Pilots Association (AOPA) Insurance Agency before joining AIR. He’s a big advocate for flying clubs.

Bill offers sound advice on the three factors that all flying clubs need to consider: Type of aircraft, number of pilots, and insurance coverage.

Choosing a plane

The least expensive and easiest to insure club planes are under 200 horsepower, fixed-wing, fixed-gear planes manufactured by Cessna, Piper, and Beech. Of course, many other GA aircraft can be and are insured in flying clubs, but the least expensive ones to insure are the ones that are the most popular.

Bill recommends starting a frugal flying club with four-seat Cessna 172s and Piper PA-28s for the lowest initial purchase and lowest operating and insuring expenses.

Choosing members

How many members should your frugal flying club have? For the lowest per-member cost, aim for less than 10 pilots per aircraft. Five to 10 per plane works out the most economical while allowing ample time for flying for each pilot.

Old pilots? New pilots? Yes! Successful flying clubs have a broad mix of pilots, from students to veterans. Often, the enthusiasm of newer pilots rubs off on the more experienced ones who may not still be in love with flying. And veteran pilots often enjoy sharing their skills and experience with newly-minted pilots.

To get the best insurance rates for your flying club, provide agents with a roster of members and data on their personal information and their flying experience, including names, birth dates, type license, ratings, total hours logged and in what make, model, and complexity.

If the club operates a compex aircraft (such as RG or MEL), make sure the pilots who use it are up-to-date on their log requirements.

Also note each pilot’s data regarding accidents, incidents, submissions, losses, or DUIs. Your aviation insurance broker will want to know this — and probably penalize your club if they find out important facts after the policy has been issued.

Even if you think the data is not fully relevant, include it as the insurance agent or broker will make the final decision as to what to include in the application to the insurance company. Your insurance broker is your partner in this transaction.

Choosing coverage

How much insurance does your frugal flying club need? For the lowest policy price, keep the hull value at or below $100,000 per aircraft, at least for the first year of the policy. With a good record, you can increase the hull value if the actual value is higher.

For the best balance of coverage and costs, initially keep the liability limits at $1 million for each occurrence and $100,000 per passenger, Bill recommends. If appropriate, ask for quotes on higher liability limits. The difference in costs may be slight and offer greater peace of mind to flying club members.

Dan Ramsey is The Frugal Pilot (FrugalPilot.com) and author of books and websites about low-cost aviation. He supports his flying habit as manager of a rural airport in northern California. You can reach him at dan@frugalpilot.com.

General Aviation News reserves the right to delete snarky, offensive or off-topic comments. See our Comment Policy for more details.

Comments

Yes, great info. On membership, the penalty could, depending on the particular situation, be denial of a claim, even policy cancellation, if complete, accurate information was not provided. So, members must understand the need for candor as to anything “naughty” they have done. It might not result in denial of a policy, but just affect the premium.

On choosing coverage, another potential cost control is to see if the desired amounts can be achieved by layered coverage: a primary policy, with an excess and/or umbrella policy over that. Insurers at the upper levels will determine that their risk of exposure is comparatively small, hence a lower premium.

Coordinate with the terms of the lease or other contract with the airport owner where the club is based, which likely states required insurance. The airport might also require that it be an “additional insured” or “additional named insured,” with specific policy endorsement for that, and that the club’s insurance be primary over the airport’s. This can be even more fun if the airport is owned by a public agency but managed by a private entity via lease or management contract.

If the club is changing policies, be aware – and beware – of the difference between “claims-based” and “occurrence-based” policies. For example, there was a mishap (“occurrence”) in 2015. Effective this New Year’s, the club changed policies, and the new one is occurrence-based, covering occurrences during the policy period: 2016. This can be a tricky area.

Things to consider, but not to dissuade, our frugal flying club friends.